TANGGUH INDEPENDENT ADVISORY PANEL FIRST REPORT ON OPERATIONS PHASE OF THE TANGGUH LNG PROJECT JANUARY 2011

Transcription

1 TANGGUH INDEPENDENT ADVISORY PANEL FIRST REPORT ON OPERATIONS PHASE OF THE TANGGUH LNG PROJECT JANUARY 2011

2 TABLE OF CONTENTS I. Introduction... 1 II. Overview... 3 III. Recommendations... 6 IV. Political Developments...9 V. Security Developments VI. Security and ICBS VII. Security and Papuan Development VIII. Human Rights IX. Governance and Revenue Management X. Revenue Flows and Transparency i-

3 ACRONYMS AND INDONESIAN TERMS adat AMDAL ADB BHBEP BPMIGAS BPKP Brimob Bupati CAP DAV Dinases DPRD EITI GOI ICBS ICITAP IPB ISP JUKLAP Local and traditional customs, laws, and dispute resolution systems used in many parts of Indonesia Analisis Mengenai Dampak Lingkungan Integrated Environmental and Social Impact Assessment Asian Development Bank Bird s Head Business Empowerment Program Badan Pelaksana Kegiatan Usaha Hulu Minyak dan Gas the National Upstream Oil and Gas Implementing Agency, the Government of Indonesia, partner in the Tangguh Project Badan Pengawasan Keuangan Dan Pembangunan State Development Audit Agency Mobile Indonesian police brigade The head of a kabupaten, or Regency Community Action Plan the support program approach to facilitating community-driven development projects in Directly Affected Villages Directly affected village as originally identified by the Tangguh project Agencies Dewan Perkwakilan Rakyat Daerah local parliamentary body Extractive Industries Transparency Initiative Government of Indonesia Integrated Community Based Security Program U.S. Department of Justice s International Criminal Investigative Training Assistance Program Institut Pertanian Bogor, or Bogor Institute of Agriculture Integrated Social Program an implementation unit within the Tangguh Project and the social-economic development programs managed by that unit Field Guidelines for Security -ii-

4 JUKLAP/PAMBERS kabupaten kampong Kapolda KNPB Komnas HAM Kopassus LARAP LNG LP3BH MCC MOU MRP NGO OECD OPM Otsus Pangdam PDP PSC PSKK UGM RESPEK 2009 update to and extension of the JUKLAP agreement District or regency Village Papua Chief of Police West Papua National Committee a Papuan separatist organization Indonesian National Human Rights Commission Komando Pasukan Khusus Indonesian army special forces command Land Acquisition and Resettlement Action Plan the Tangguh Project action plan describing the involuntary resettlement impacts of the Project Liquified natural gas Papuan human rights NGO Mediatama Cipta Citra Memorandum of understanding Papuan People s Council a representative body composed of religious, adat, and women s leaders created by the Special Autonomy law Non-governmental organization Organization for Economic Cooperation and Development Organisasi Papua Merdeka, or Free Papua Movement a separatist organization Special Autonomy Papua Regional TNI Command BP s Personal Development Plans Production sharing contract Center for Population and Policy Studies at Gadjah Mada University Governor s village empowerment program RAV Resettlement Affected Village as originally identified by the Tangguh Project Tanah Merah Baru, Saengga, and Onar SBY Indonesian President Susilo Bambang Yudhoyono -iii-

5 SKJ SOP STAN TIAP TNI GOI policy restricting access to Papua Standard operating procedure State Administration College Tangguh Independent Advisory Panel Tentara Nasional Indonesia Indonesian armed forces -iv-

6 I. Introduction The Tangguh Independent Advisory Panel ( TIAP ) was established by BP in 2002 to provide external advice to senior decision-makers regarding non-commercial aspects of the Tangguh LNG Project ( Tangguh or the Project ). During the construction phase, the Panel was Chaired by Senator George Mitchell, and included Lord Hannay of Chiswick, Ambassador Sabam Siagian and Reverend Herman Saud. The first panel ended its work in May BP established a second TIAP in 2009 to be headed by former U.S. Senator Chuck Hagel and including Augustinus ( August ) Rumansara, a Papuan who is currently an environmental advisor to the Governor of Papua and who previously served as the Chair of the Asian Development Bank Compliance Review Panel between December 2003 and December In March 2010, Senator Hagel encountered an unexpected commitment and had to withdraw from the Panel. BP is in process of naming a new international Chair but chose not to delay the work of the Panel until that process was completed. Thus, in the interim, Pak August, as acting Chair, together with Gary Klein, a senior partner in the law firm DLA Piper, the Panel s independent counsel and secretariat since it was established, visited Jakarta and Papua 1 in advance of this report. In addition, this report follows an earlier familiarization visit by Pak August in December The Panel s scope is narrower than the original TIAP in order to avoid duplication. The Tangguh Lenders Group (represented by the Asian Development Bank, Japan Bank for International Cooperation and Mizuho Corporate Bank) have established an External Panel that 1 For the purposes of this report, the term Papua refers to the region encompassing both Papua province and Papua Barat ( West Papua ) province. The term Papua province refers to the province of Papua following its split with Papua Barat province. The term Papua Barat refers to province of Papua Barat (previously known as Irian Jaya Barat) following its establishment in A map of Papua Barat showing key locations related to Tangguh is included as Appendix 1.

7 is staffed by independent experts who visit regularly and publish their reviews of compliance (on the ADB website) on issues connected to safety, environment, resettlement, indigenous people and progress with social programs. With the exception of the reviews of resettlement issues (the physical aspects of which has been completed) these reviews should continue to In recognition of the work of the Tangguh Lenders Group and the start of Tangguh operations, the new TIAP will focus its advice to BP on matters relating to non-commercial aspects of the Project while not duplicating the existing Tangguh Lenders Group s independent external review procedures. Accordingly, TIAP will particularly focus its attention on matters relating to security, human rights, governance and revenue management in the region, while maintaining an overview of the related broader non-commercial issues that affect how Tangguh is perceived by the Papuan people and government in general. This is because these perceptions affect Tangguh security and relate directly to whether Tangguh can achieve its potential as a world-class model for development. On this trip, from September 28 October 5, 2010, the Panel met with government officials and NGOs in Jakarta, Manokwari and Jayapura, the Papua TNI Commander (the Pangdam ), the Papua Chief of Police (the Kapolda ) and the U.S. and U.K. Ambassadors to Indonesia. TIAP travelled to Bintuni Bay for visits with local leaders, villagers on both the north and south shores, skilled Papuan workers employed by BP, and the operations and security teams at the LNG site. 2 This Panel, as did the original TIAP, will consider BP s activities in relation to the most respected current global norms that establish best practices for projects in developing countries. These include the Universal Declaration of Human Rights; the U.N. Norms on the 2 A list of all individuals and entities consulted by the Panel during the past year and over the period of its work since 2002 is included at Appendix 2. 2

8 Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights; the Organization for Economic Cooperation and Development ( OECD ) Guidelines for Multinational Enterprises; the International Labor Organization Convention Concerning Indigenous and Tribal Peoples in Independent Countries; the World Bank Operational Directive with respect to indigenous peoples; and the U.S. U.K. Voluntary Principles on Security and Human Rights (the Voluntary Principles ). The Panel does not audit BP s compliance with Indonesian or local law, but does consider BP s obligations under the AMDAL (which governs BP s social and environmental commitments). 3 The Panel was given complete access to all information it requested and total independence in its inquiries and findings. The conclusions and recommendations in this report are those of the Panel alone. II. Overview Tangguh is now in full operation, the construction of two LNG trains is complete, both trains are active and LNG tankers are regularly traversing Bintuni Bay. The facility footprint is confined to 335 hectares and surrounded by approximately 2,900 hectares of indigenous forest. From land, it is only visible from the resettled villages of Tanah Merah Baru and Saengga, but it is visible clearly from many points on Bintuni Bay. The LNG tanks are by far the largest structures in the region, and the flare is visible from the Bay for many miles. The two jetties extend well offshore, impeding the movement of local fishermen from the resettled villages. The two offshore production platforms do not interfere with fishing or other commercial activities. 3 The Lenders Panel will continue to review BP s LARAP (resettlement), AMDAL, and Integrated Social Program ( ISP ) obligations. The Lenders Panel reviewed ISP and resettlement issues biannually until 2009; the ISP reviews will continue annually until 2021; the environmental monitoring will take place annually for the duration of the loan period (15 years) to ensure compliance with the requirements of the Asian Development Bank and the Japan Bank for International Cooperation. 3

9 Activity in the nearby town of Babo, which served as base camp during the construction phase, is now reduced; regular commercial flights to Babo s airstrip, maintained by BP and still operating, have ended. However, other non-indigenous activities in the area are increasing. In addition to commercial fishing by non-papuan companies, and logging operations, other oil and gas companies have now entered the Bintuni Bay area exploring under six separate production sharing contracts ( PSCs ). Manokwari, which became the capital of Papua Barat province upon its creation in 2004, shows much economic and construction activity. Although roads are being improved, Manokwari remains at least five to six hours away from Bintuni by road. The regency, or kabupaten, capital of Bintuni is also growing rapidly since the designation of the new regency in In part because both Manokwari and Bintuni are still new to this level of government, they suffer from a lack of established governmental capacity and civil society. Jayapura, the historic capital of the region, now the capital of Papua province, has such capacity but is less directly involved in matters related to Tangguh. However, both the Pangdam (TNI) and the Kapolda (police), who retain security jurisdiction over Papua province and Papua Barat, remain in Jayapura. That sprawling city and its environs are also growing rapidly, with many signs of construction and commercial activity, but it is seriously overcrowded with migrants, with an estimated population of 350,000. The villages near the facility (the Directly Affected Villages or DAVs ) now all have improved infrastructure, clean water programs and at least some electricity; the resettled villages ( RAVs ) of Tanah Merah Baru and Saengga additionally have all new modern housing, public buildings and religious facilities. Several of the DAVs have begun commercial agriculture development, and are selling fruits and vegetables to BP s food service contractor. Others are 4

10 developing improved fishing and crabbing techniques, making sales to Tangguh and others. All of the DAVs have benefited from the health, education, governance, livelihood and community relations programs of the Integrated Social Program ( ISP ), which began in 2006; the ISP has been continued for a second five-year period, ( ISP 2 ). The LNG facility itself has about 1,700 Papuan employees (counting contractors), including about 320 security guards and almost 100 skilled technicians trained by BP. 4 Support for the Project and its potential to improve Papua is strong among government officials at all levels. Officials in Jakarta are supportive of BP s community development, social and security programs. BPMIGAS, the upstream regulator, supports all of BP s security related activities and is encouraging other PSC operators to replicate the Integrated Community Based Security program ( ICBS ). Regional and local leaders, although anxious for more employment and advancement of Papuans, are pleased at BP s efforts and accomplishments thus far. Local villagers are also generally supportive, even on the north shore, where there was considerable hostility earlier. Complaints relate primarily to livelihood issues, adat (cultural rights) compensation, employment, and in-migration. There is near unanimous support for the ICBS program, from national leaders to the Kapolda and the Pangdam to local villagers. Virtually all the private security guards employed by contractor G4S are Papuan; most from the Bird s Head region of Papua Barat. All have undergone human rights training under the Voluntary Principles, as have the police and TNI troops stationed in Bintuni Bay. There have been no allegations of abuse or excessive force by any of the security guards or by local public security forces. With the exception of a small police post at Tanah Merah Baru, there are no police or military stationed in the immediate area of the 4 This is a sharp decrease from the height of construction, when the facility had approximately 10,000 workers, and at its peak almost 3,000 were Papuan. 5

11 Project. The most serious incidents related to the Project involved: (1) demonstrations/protests at nearby towns regarding adat compensation or hiring; and (2) violations of the marine exclusion zone surrounding the jetties by local fishermen. There have also been firings of employees (some local) for violations of Tangguh s zero tolerance policy relating to theft of fuel, possession of alcohol and fighting. III. Recommendations Security and ICBS If any financial or material support is requested by the Police or TNI, BP should make clear that it cannot provide funding or equipment to either the military or the police and that any support is pursuant to the procedures of the JUKLAP/PAMBERS agreement and the approval of BPMIGAS. BP should confirm with BPMIGAS its commitment to posting any payments to Papuan police on its website. BP should work with the police and the TNI to ensure that any police or TNI units that could be deployed at Tangguh in an emergency receive periodic training in the human rights principles of the Voluntary Principles embodied in the JUKLAP/PAMBERS. BP should continue to organize the annual joint training exercise with the police required by the JUKLAP/PAMBERS and include the TNI and human rights NGOs as observers. BP should include these observers in its evaluation of the joint exercises. BP security should work with the Kapolda to develop crisis management simulation procedures and test these procedures during the annual exercise. BP should encourage BPMIGAS and the two Papuan Governors to require other oil and gas companies operating in Papua to implement security procedures similar to the ICBS. Security and Papuan Development Employment, Advancement and Procurement: BP should continue to discourage migration into the area by limiting recruitment to distant employment centers, other than recruitment of DAV residents in families from the original census. It should also seek to make sure that all Papuans who are recruited are indigenous Papuans. 6

12 The Papuan Development Committee should focus, as one of its priorities, on the advancement of skilled Papuan technicians at Tangguh. Advanced training programs should be offered and/or efforts should be made to increase top-level and middle management attention to fulfilling the goals of the Personal Development Plans of Papuan technicians. An annual target for recruitment, training and advancement of Papuan technicians should be set to ensure that AMDAL commitments are met. BP should work with its contractors to increase local recruitment and ensure it meets its AMDAL commitments for Papuan and DAV employment. Annual targets should be set for employment of Papuans. If targets for hiring Papuans by BP and/or its contractors are not met, BP should increase Papuan recruitment efforts. If the manpower office in Bintuni is insufficient to recruit local Papuans, BP should expand recruitment activities at other locations in Bintuni Bay. BP should include local procurement obligations, similar to those included in the Indocater contract, in all Tangguh procurements, as appropriate. If procurement of fish, prawns, produce or other products from local sellers is not feasible, contractors should be required to use products from the region, or justify why this is not possible. ISP: Given the absence of effective media or civil society in the area, BP should more actively publicize and communicate the benefits of its programs for Papuan human resource development, livelihood enhancement, education and health, as well as the effectiveness of ICBS for the peaceful resolution of disputes. The Bird s Head Business Empowerment Program ( BHBEP ) should be continued for the long term, and adapted periodically to focus on those aspects of the program that most effectively bring new businesses into the Tangguh supply chain. Microenterprise and microfinance development in the Bay is essential for a sustainable and self reliant household and local economy. BP should augment ongoing programs with increased effort to develop a value chain structure to link potential buyers outside the Bay with local producers, particularly of fish and prawns. Human Rights Oil and gas law familiarization briefings and security forums in the DAVs and other local communities should be conducted on a regular basis. BP should fully socialize the community complaint process at each of the security forums held in the local communities. 7

13 BP should review the relevant procedures in its community complaint process, consulting with local leaders and simplifying the process if necessary or useful. It may be necessary to institute an oral complaint process or publicize the procedure more broadly. BP should support the work of at least a part-time human rights advocate in Bintuni Bay. The advocate should participate in the community security forums conducted by BP. Governance and Revenue Management BP should maintain a sustained effort to increase capacities of government and civil society at the village, kabupaten and provincial levels. These programs should be revisited regularly for performance assessments and modified as needed. In the DAVs, BP should provide training and support for village decision-making in the use of the Community Action Plan ( CAP ) funding until it expires in BP should work with the kabupaten government to formulate a policy to integrate and coordinate the various development plans for each village, including under the Government of Indonesia ( GOI ) Musbangdes program, the Governor s Village Empowerment Program ( RESPEK ) and BP s CAP funding. For the kabupaten level, BP should consider working with another implementing partner that specializes in in-depth public administration training to provide such training for selected senior level local officials and leaders in civil society. BP should make the provincial government at Manokwari the secondary focus of the governance program. It should regularly sponsor good government and anticorruption activities, such as the 2008 seminar in Manokwari with the KPK. All of these activities should be coordinated with the provincial government and/or the DPRD, as appropriate. Revenue Flows and Transparency BP should continue its governance program and work closely with the Kabupaten administration to exercise transparency in their budgets and spending, particularly with regard to funds related to Tangguh. In recognition of the adat rights of all the tribes in the local area, and to sustain community development activities in the kabupaten beyond the DAVs, BP should encourage the kabupaten and provincial government to establish a community development trust fund for this purpose. Experience from the approach used by the Dimaga Foundation could be a model for this new entity. 8

14 IV. Political Developments The political environment in Papua may be somewhat less stable now than in This is primarily the result of widespread dissatisfaction with the implementation of Special Autonomy. The fundamental political/economic underpinning for stability in Papua is the Special Autonomy law, which was enacted in 2001 as a way to afford Papua unique economic and political rights and to undermine separatist sentiment. Special Autonomy, known as Otsus in Papua, provides significant additional funding for provincial and local (kabupaten) programs, as well as avowed deference to Papua s unique cultural heritage. Very large revenue flows are now going to Papua, detailed more fully in section X below, but the benefits of this revenue do not all accrue to Papuans. There is a broad view that the real beneficiaries are local elites in both Papua provinces, Jakarta and non-papuan migrants. Even more importantly, it is widely believed that the political aspects of Special Autonomy, primarily of cultural respect and deference, have largely been disregarded by the GOI. This dissatisfaction erupted last year when the Papuan People s Council ( MRP ), a cultural institution created by Special Autonomy, issued a decision, known as SK14, that would require all candidates for Bupati and Deputy Bupati to be indigenous Papuans. The decision was based in part on the provision in Special Autonomy that permits the MRP to ensure that all candidates for Governor and Vice Governor are Papuans. But this edict was fundamentally a result of the serious concern among Papuan leaders that with migration from Java and other areas, they are becoming a minority in their own land and with time will lose their political power and their cultural heritage. Some have stated that indigenous Papuans are already a minority in Papua. 5 SK14 needed the approval of the GOI to be effective but was rejected 5 The preliminary report of the 2010 census reveals that Papua and Papua Barat s populations now stand at around 2.9 million and 761,000 respectively, or about 3.6 million people combined. The figure jumped from 2.2 million in 9

15 summarily by Jakarta as a violation of national law. There was no dialogue or effort to address the underlying concerns. As a result, the MRP hosted a consultation of indigenous Papuans in June that concluded by adopting militants recommendations to: (1) hand back Special Autonomy; (2) demand an internationally-mediated dialogue; (3) conduct a referendum on independence; and (4) close the Freeport mine. 6 There followed in June and July mass demonstrations against Special Autonomy, and requests to the provincial parliament, the DPRD, to take action on the recommendations. 7 When the Panel was in Jakarta, President Susilo Bambang Yudhoyono ( SBY ) sent 11 ministers, including the three senior Coordinating Ministers for Politics and Security, Economics, and Public Welfare to Papua for consultations. The two Papuan Governors then travelled to Jakarta for further discussions. SBY has since gone to Jayapura for discussions with the two Governors. 8 The Panel cannot predict the outcome of these deliberations, although they seem to indicate that Jakarta has determined to enter into some dialogue with Papuan leaders. A second cause of political instability is the continuing tension regarding subdivision of political jurisdictions in Papua. The province of Papua Barat was created in 2004 over the strenuous objections of the MRP, which seems to have the right to approve such divisions under the Special Autonomy law. In part because of that controversy, SBY has imposed a moratorium on new provinces, but that is not likely to be permanent. Now that Papua Barat is functioning 2000, when the two provinces were still one province, making them the provinces with the fastest population growth in Indonesia. Much of this increase is the result of migration. 6 TIAP was informed by one person close to these discussions that closure of Tangguh was on some of the original lists of demands but later withdrawn. 7 The political background of this dispute and a detailed description of the events of this year are detailed in a report of the International Crisis Group, Indonesia: Deepening Impasse in Papua (August 2010). See also, International Crisis Group, Radicalisation and Dialogue in Papua (March 2010). 8 President SBY travelled to Jayapura on November He met officials from the Papua and Papua Barat administrations at the Papua governor s office to discuss strengthening the local economy. The President and administration officials also signed an integrity pact, reaffirming their loyalty to the country. 10

16 (and accepted by the MRP), there are other efforts to carve Papua into as many as seven separate provinces. At the same time, some areas within each province are seeking to form new kabupatens, claiming separate cultural and language heritages. None of these new subdivisions would likely affect Tangguh directly. Each new province or kabupaten would get its allocable share of revenues and authorities under Special Autonomy and the nationwide Regional Autonomy laws. Accordingly, the Panel expects these pressures for subdivision to continue for some time. In Bintuni Bay, the considerable tensions between north and south shore villages regarding the benefits relating to Tangguh seem to have subsided. These tensions were exacerbated by claims from clans on the north shore of adat ownership rights to gas that is under their land, and also by the special benefits provided to the RAVs on the south shore, where the LNG facility is located. In relation to these adat claims, the GOI, together with the Governor of Papua Barat and the Bupati, agreed to a special payment of about $600,000 to the north shore clans. In addition, as a result of BP s efforts as well as the Bupati s, the Bintuni Bay Development Foundation was established and is now functioning to accelerate infrastructure improvement in north shore communities. However, tensions between indigenous Papuans and in-migrants continue. These tensions may not create a direct threat to the Project, but they affect the well-being of the people closest to the Project. Most of these in-migrants settled in the RAVs or other villages on the south shore during the construction phase, or in the larger towns of Bintuni and Babo. 9 The migrants brought competition for scarce resources, as well as social and cultural tensions to the villages. Problems with alcohol, gambling, prostitution and HIV/AIDS accompanied the influx. 9 BP discouraged in-migration to the extent possible by not hiring any workers at the RAVs or at the LNG site. All workers (except DAV residents) were recruited at four larger towns at some distance from the facility: Bintuni, Fak- Fak, Sorong and Babo. In addition, BP built no roads to the RAVs or to the LNG site. 11

17 Much of the new commercial activities in the RAVs were started by and are run by the migrants, rather than by Papuans. At one point, during construction, it was estimated that half of the residents of the RAVs were migrants, some of whom were renting the new homes or rooms therein from villagers. The local government was unable to agree on a policy relating to migrant s rights and repatriation. 10 The number of migrants in the RAVs has decreased materially since the end of construction and the consequent huge declines in the workforce. 11 Also, the local government and BP s Integrated Social Program ( ISP ) have made efforts to encourage indigenous commercial activity. Other than support livelihood development, BP can do little directly to reduce underlying tensions. But BP can continue to discourage migration by limiting recruitment to distant employment centers, other than DAV residents in families from the original census, and it can seek to make sure that any DAV residents that are recruited are actually indigenous local Papuans. Bintuni Bay held its second general election in The Bupati, Alfons Manibui, and his running mate, Deky Kawab, were reelected to a second and final term in September by a vote of about 17,000 to 13,000. However, in what is becoming a typical exercise in the growing democracy, the result was challenged in the Constitutional Court in Jakarta by the losing candidate who claimed fraud. Interestingly, Bupati Alfons, whose father is not Papuan, would not have qualified for office had the MRP s SK14 been implemented. 13 The Bupati survived the court challenge and will serve until This augers well for local stability during this period. 10 See TIAP Seventh Report at 55 (March 2009). 11 The village office in Tanah Merah Baru, which has a wall board detailing the demographics of all residents, indicates that only about 20-25% of the residents are now migrants. 12 Direct elections of Governors and Bupatis were begun in Previously, these officials were appointed by the governing party in Jakarta. 13 SK14 defines a Papuan eligible for office as one with two Papuan parents or a Papuan father. There are several other definitions of Papuan, including one who is recognized as Papuan by a clan, and one who has lived in Papua for 10 years. These multiple definitions further complicate eligibility for all programs designed to benefit Papuans, including BP s programs for Papuan employment and advancement. 12

18 V. Security Developments The level of political violence in Papua generally has increased in the past year. The violence began in 2009 around the time of the elections in April, primarily in Jayapura and the nearby Cenderwasih University community of Abepura. But most of the violence has been in the area of Freeport s mining road near Timika, which is several hundred kilometers from Tangguh, and in the remote Central Highlands, equally distant. Several shootings have occurred that may be the work of separatist militants. Reactions by the TNI have raised serious issues of abuse and human rights violations. The U.S. Department of State, in its most recent annual Country Report on Human Rights Practices, again highlighted a range of human rights infringements by the security forces in Indonesia, including in both Papua and Papua Barat. These included killings by security force personnel; the beating and detention of numerous Papuans for raising the Morning Star flag; monitoring, threatening, and intimidation of Papuan NGOs by Indonesian intelligence forces; and restrictions on travel to Papua. The report also references widespread discrimination against indigenous Papuans, noting that there has been little improvement with respect to their land rights. 14 In addition, the U.S. Congress s Subcommittee on Asia and the Pacific, chaired by Delegate Eni Faleomavaega of American Samoa, held a hearing on September 22, 2010 titled Crimes Against Humanity: When Will Indonesia s Military Be Held Accountable for Deliberate and Systematic Abuses in West Papua. 15 The hearing was called to bring attention to what some human rights NGOs and Papuan activists claim are continuing violations of international 14 U.S. Department of State, Country Reports on Human Rights Practices 2009 (March 2010). 15 The hearing title s reference to West Papua alludes to Papua s name prior to its inclusion in Indonesia, not to the newly formed province of Papua Barat. 13

19 human rights standards by the TNI. Rep. Faleomavaega was most irked by the GOI s refusal to allow him, on a visit to Indonesia in 2007, to freely enter Papua. He was allowed only to go to Biak for several hours; he was not permitted to go to Jayapura, or to get off the plane in Manokwari. The GOI policy of limiting access to Papua continues to this day. Known as SKJ, the policy denies access to foreign NGOs, academics, journalists and most others without a legitimate business purpose to visit Papua. The Panel made clear to GOI officials, as had the prior Panel on many occasions, that this policy is counterproductive and not only stifles Papuan development, but also leads to suspicions about what is really happening in the province. Further, the U.S. Senate has proposed to continue the longstanding restrictions on the funding for the Indonesia Foreign Military Financing Program. These restrictions were initially instituted in protest of Indonesia s human rights practices and past abuses in East Timor, but, more recently, include criticism over the GOI s restrictions on access to Papua. The full level of appropriated funds, $22 million, would only be made available following a report by the Secretary of State describing steps taken by the GOI to address human rights abuses by the military as well as steps taken by the military to implement transparency and accountability reforms, including the divestment of military businesses. The report would also address whether the GOI is allowing public access to Papua for foreign diplomats, NGOs and journalists. 16 Human Rights Watch also continues to focus attention on Papua. It states that there are 16 State Department and Foreign Operations Appropriations, S. 3676, 111th Cong. 2nd. Sess. (2010). This has not been enacted into law, but the conditions imposed previously will remain in effect pursuant to the Continuing Resolution that funds the Department of State, H.R (December 21, 2010). Despite these restrictions, U.S. Defense Secretary Gates earlier this year began a gradual, limited program of security cooperation activities with the Indonesian Army Special Forces ( Kopassus ). He credited this improvement to Indonesian military reforms over the past decade, the ongoing professionalization of the TNI, and recent actions taken by the Ministry of Defense to address human rights issues. He noted that these initial steps will take place within the limits of U.S. law and do not signal any lessening of the importance the U.S. places on human rights and accountability. He added that the ability of the U.S. to expand upon these initial steps will depend upon continued implementation of reforms within Kopassus and TNI as a whole. Senator Patrick Leahy (D-VT), author of the restrictions on cooperation, responded that Kopassus has a long history of abuses and remains unrepentant, essentially unreformed, and unaccountable. I deeply regret that before starting down the road of reengagement, our country did not obtain and Kopassus did not accept the necessary reforms we have long sought. 14

20 48 Papuan political prisoners jailed for treason and details several of the cases in its report, Prosecuting Political Aspiration: Indonesia s Political Prisoners (June 2010). Most recently, a video appeared on the website YouTube depicting the torture by men in TNI fatigues of a prisoner in the Central Highlands. SBY and the TNI have expressed disapproval of such actions. In response, a court martial has convicted three soldiers of relatively minor crimes of abuse and disobeying orders, with sentences of eight to 10 months. However, the minor charges and short sentences have led human rights activists to doubt the Indonesian government s pledges to rein in military abuse. In addition, the National Human Rights Commission (Komnas HAM) says it will launch an independent investigation into this and other reports of rights violations committed by law enforcers against Papuans. VI. Security and ICBS The Panel met with both the Kapolda and the Pangdam to discuss security issues. Under a military reform law enacted in 2005, the police, rather than the TNI, have responsibility to protect Tangguh and other vital national assets. The National Police and BPMIGAS entered into a MOU that formed the framework for security guidelines related to specific facilities. Under such an implementing agreement between BP and the Kapolda, called the JUKLAP or Field Guidelines for Security, ICBS procedures are detailed for responses to any incident at the facility requiring security forces. These procedures make clear that: (1) BP security will be responsible for most incidents; (2) the police will respond only when called by BP pursuant to specific guidelines; and (3) the TNI will be called in very rarely, and only when the police and BP agree that such a response is needed. Both the Kapolda and the Pangdam are aware of and very supportive of these arrangements. The Pangdam could not see any reasonably foreseeable 15

21 situation, other than a natural disaster, that would require the intervention of the TNI at Tangguh. 17 Both the Kapolda and the Pangdam are supportive of affirmative action to elevate Papuans in the security forces and sensitive to the need to protect and respect the local adat culture. Both also are receptive to human rights training for their forces. Regarding Tangguh, their most significant security concerns relate to the remoteness of the facility and the long response time required if called. Bintuni, the nearest substantial police and TNI presence, is three or four hours away by boat. The Kapolda made clear there is no need for more troops, but there is need for increased capacity. He desires a small, fast boat for marine response and the Pangdam would like a better helicopter capability. These may be legitimate needs for effective response; however, the Panel and BP made clear that such equipment cannot be provided by BP. In 2009, the JUKLAP was extended for five years and amended to include offshore security by the JUKLAP/PAMBERS, which further refines and formalizes the principles of ICBS. Under this agreement, BP security is responsible for all routine or even alarming conditions within its capability and police backup will participate only upon the request of BP security. The TNI could be called only under extremely alarming conditions or other compelling circumstances with which the police cannot cope, and based on an evaluation by both the police and the BP Tangguh Operations Security Manager. Significantly, all expenses incurred by either BP or the police in performance of the agreement will be borne by that party, other than in the event that BP requests police backup. If police are called in by BP, payment will be limited to actual transport, lodging, meals and per diem expenses. No payments are authorized to individuals (per diems will be paid to the account 17 The Pangdam also noted that TNI troops would be responsive to any request by the Governor or the Bupati for dealing with an emergency. 16

22 of the Police), and no payment will be made without BPMIGAS approval and pursuant to its procedures as the regulatory authority. The JUKLAP/PAMBERS does not require that BP post any such payments to the police for public inspection, but instead leaves these disclosures to the discretion of the police or BP. BP has in the past agreed to post all payments to the Papua police on its website; it should reiterate its commitment to disclose all such payments and make certain that such disclosure is acceptable to BPMIGAS. Importantly, this agreement places upholding human rights and the use of minimal force as fundamental principles. It specifically incorporates and requires adherence to the Voluntary Principles on Security and Human Rights as well as the U.N. Basic Principles on the Use of Force. It requires BP security and Papua police to be trained in and be familiar with these standards. All BP private security personnel have been so trained. BP has contracted for training of local police and certain selected police stationed at Bintuni, Babo and Manokwari. The training is sponsored by ICITAP, a U.S. funded Department of Justice program. 18 The Kapolda is receptive to human rights training for any and all of these units. If a request to the police is made for police backup to deal with an emergency at Tangguh, they could be deployed from any of the several locations, including Babo, Bintuni, Fakfak, Sorong or Manokwari. Thus, BP should ensure that any units that could be deployed at Tangguh from these locations receive periodic training in the human rights principles embodied in the JUKLAP. In addition to human rights training, the JUKLAP/PAMBERS calls for joint exercises at least once a year and special crisis management simulation and training to be developed and 18 The mission of the International Criminal Investigative Training Assistance Program (ICITAP) is to work with foreign governments to develop professional and transparent law enforcement institutions that protect human rights, combat corruption, and reduce the threat of transnational crime and terrorism. Situated in the Department of Justice s Criminal Division, it is funded primarily by the U.S. State Department. 17

23 scheduled. For several years, annual table top training exercises have been carried out with the police, with TNI participating recently as observers. Given the high turnover of both police and TNI personnel, it is critical that these joint exercises take place every year, and that they include the TNI as observers. Although it is unlikely that TNI would be involved in any response, it is important that current officers and commanders understand that fully, and feel comfortable with the JUKLAP process. Representatives of human rights NGOs should also be invited as observers. Comments of these observers should be included in the evaluation of the joint exercises. It is also important that the crisis management simulation training not only be developed, but that it also be implemented and tested each year in the joint exercises. BP s contracted private security force has been a model for local capabilities. It is almost entirely Papuan; 95% from the local area. All have taken basic human rights training. There have been no incidents alleging excessive use of force. There are far fewer serious breaches of the exclusion zone around the jetties than previously. This is the result of cooperation between BP security and the marine police, as well as stern warnings issued to villagers who trespassed. Recommendations If any financial or material support is requested by the Police or TNI, BP should make clear that it cannot provide funding or equipment to either the military or the police and that any support is pursuant to the procedures of the JUKLAP/PAMBERS agreement and the approval of BPMIGAS. BP should confirm with BPMIGAS its commitment to posting any payments to Papuan police on its website. BP should work with the police and the TNI to ensure that any police or TNI units that could be deployed at Tangguh in an emergency receive periodic training in the human rights principles of the Voluntary Principles embodied in the JUKLAP/PAMBERS. BP should continue to organize the annual joint training exercise with the police required by the JUKLAP/PAMBERS and include the TNI and human rights NGOs as observers. BP should include these observers in its evaluation of the joint 18

24 exercises. BP security should work with the Kapolda to develop crisis management simulation procedures and test these procedures during the annual exercise. BP should encourage BPMIGAS and the two Papuan Governors to require other oil and gas companies operating in Papua to implement security procedures similar to the ICBS. VII. Security and Papuan Development In many respects, the most critical program to ensure security at Tangguh is the implementation of ICBS. As the framework for responding to threats or incidents, ICBS together with the JUKLAP and its extension have been a success thus far, and a model for others in Indonesia to follow. But ICBS is really the last line of defensive security, coming into play primarily after a threat materializes. The foundation for effective security at Tangguh is the attitudes and feelings of the people in the region toward Tangguh and BP. These attitudes are formed primarily by their perspective of what Tangguh does for the community, and for Papua more generally. From the highest political levels in Jayapura and Manokwari (as well as Jakarta) to the villagers in the DAVs, it is most important to security that the Project is known to be benefitting Papuans and the local community and that every conflict within the indigenous community regarding Tangguh is resolved peacefully. 19 Thus, BP s programs for Papuan human resource development, livelihood enhancement, education and health are inextricably tied to security. And communicating the benefits of these programs effectively is essential given the absence of any media or civil society in the area. Human resource development may be the most important program that gives Papuans, and local Papuans in particular, a sense of ownership in the Project. There are at least two 19 TIAP was informed by one person close to the discussions organized by MRP with regard to SK14 that the withdrawal of closing Tangguh from the original lists of demands was precisely because of a general opinion that Tangguh could be a model for companies operating in Papua. See footnote 5. 19

25 components of human resource development important to this goal: Papuan recruitment and Papuan advancement. Regarding recruitment, BP has worked to meet its AMDAL commitments for Papuan employment, which will reach 100% of skilled workers and significant portions of supervisory and management positions by 2029 (20 years from startup). It has established a Papuan Development Committee (as recommended by TIAP) to oversee progress toward these and interim requirements. For the most part, BP has met its targets. 20 However, as of September 2010, recruiting has failed to meet the 2009 interim requirement of 50% of low skilled workers from the DAVs. This is surprising because of the much lower numbers of total unskilled employees following the end of construction. Because all of the low skilled workers are Papuan, this failure is only of consequence locally. 21 But it illustrates the difficulty that lies ahead as the targets for local and Papuan employment increase for all skill levels. Many of these more skilled workers are likely to come from workers already employed at Tangguh who are promoted. BP should work with its contractors to increase local recruitment. If the manpower office at Bintuni is insufficient, it should expand recruitment activities at other locations in Bintuni Bay. The principal program promoting advancement is the training of Papuan technicians. Three groups of about 25 Papuans were trained at Bontang before Tangguh began operating; new classes are now being trained at Tangguh. In discussions with Tangguh management and a group of the technical trainees who are on the job, it is clear that more needs to be done to move 20 It is important that the Papuans that are hired both by BP and its contractors through normal manpower recruiting are considered Papuans by the accepted definitions. While this can be an ambiguous test, it would be unfortunate if BP were alleged not to have met AMDAL requirements because the Papuans hired are not considered Papuans by local cultural standards. 21 There have been protest demonstrations in Babo and Bintuni regarding BP hiring and procurement practices for local Papuans. But it is not clear to the Panel that these were directly related to the missed target of unskilled workers from the DAVs. 20

26 significant numbers of Papuans into supervisory and management positions over the long term. Although English language training is now available and being utilized, and senior management wants these Papuans to succeed, the program needs to be intensified. Advanced training should be offered and/or efforts should be made to increase middle management attention to helping these Papuans achieve the goals of their Personal Development Plans ( PDP ). Affirmative action is never easy, but it is required here. The Papua Development Committee, with the supervision of Tangguh top level management, should focus as one of its priorities on the advancement of these Papuans, who will be among the best ambassadors over the long term for what BP accomplishes at Tangguh. 22 In addition, an annual target should be established for the recruitment of new Papuan technicians to ensure meeting AMDAL commitments. Livelihood enhancement in the region is another program that will surely deliver benefits to both the local economy and to Tangguh security. This applies particularly to the development of fishing, agriculture and micro-enterprises in the DAVs and the procurement of goods and services from businesses in the Bird s Head region. At the local level, BP, with its partners the SatuNama Foundation and the Bogor Institute of Agriculture ( IPB ), has developed commercial fruit and vegetable gardens and stocking points in several of the DAVs. BP is supporting increased fish production through more effective nets, outboard motor repair and crab fattening; and it continues to support savings and loan ventures in the DAVs (although progress has been very slow). This is useful. But additional support for microenterprise activity, particularly efforts to connect these local sellers of fish and prawns with purchasers outside of Bintuni Bay would bring significant benefits to the economies of the DAVs. 22 TIAP previously recommended that management conduct a yearly review to determine what additional actions may be needed, and that annual performance reviews for managers responsible for these goals consider whether targets were met. The current Panel endorses those recommendations. 21

27 Indocater, Tangguh s food service contractor, is purchasing fish, fruits and vegetables from these DAV enterprises. While there are issues in dispute regarding amounts purchased and terms of payment, the project is a clear success. Those involved in the DAVs are excited about their production and their revenues. These local purchases were a requirement of the Indocater contract. Although the AMDAL does not impose quantitative local procurement requirements, similar obligations should be included in all Tangguh procurements, as appropriate. If local procurement is not feasible, contractors should be required to use content from the region, or justify why this is not possible. On the regional level, BP has continued the Bird s Head Business Empowerment Program ( BHBEP ) with its new partner PT Austraining Nusantara through BHBEP s goal is to develop businesses with capabilities and systems that can supply Tangguh and others. It has conducted mentoring of businesses in Bintuni and the other population centers in the Bird s Head region. Progress is slow and incremental. However, expansion of regional procurement is not likely without the BHBEP. The program not only advances the regional economy, but it also promotes and disseminates the benefits of Tangguh throughout the region, enhancing Tangguh s reputation and security. For these reasons, the BHBEP should be continued for the long term and adapted to focus on those aspects of the program that most effectively bring new businesses into the Tangguh supply chain. Over time, progress in education and health in Bintuni Bay will be recognized both locally and regionally as related to Tangguh. Setbacks or stagnation in these critical areas also will be attributed to BP. These are, of course, social ( ISP ) programs that are not directly related to plant security. Therefore, as explained earlier, TIAP will not assess these programs in detail, or make specific recommendations. However, the well-being of the people of Bintuni 22